Hang Seng
A market-capitalization weighted index of the stock prices of the 33 largest companies on the Hong Kong market. The index is subdivided into four industries: financial, utilities, property and commerce.
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Hard asset
Also known as a tangible asset, a hard asset is one whose value depends on particular physical properties. These include reproducible assets such as buildings or machinery and nonreproducible assets such as land, a mine, or a work of art. Assets that have no physical presence, such as goodwill or a copyright, are called intangible assets. An industrial company with a lot of hard assets (factories, machinery, etc.) is best valued by its price-to-book ratio. But companies that have a lot of intangible intellectual assets (such as software makers or pharmaceutical companies) should be valued by other means. See "Price/Book Value."
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Health-care power of attorney
Document authorizing someone to make medical decisions for you in the event you are temporarily or permanently unable to do so. This document, also called a health-care proxy, is often coupled with a living will.
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Hedge fund
A private investment partnership, owned by wealthy individuals and institutions, which is allowed to use aggressive strategies that are unavailable to mutual funds, including short selling, leverage, program trading, swaps, arbitrage and derivatives. Since they are restricted by law to less than 100 investors, the minimum hedge-fund investment is typically $1 million.
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Hedging
A strategy designed to reduce investment risk using call options, put options, short selling or futures contracts. A hedge can help lock in existing profits. Examples include a position in a futures market to offset the position held in a cash market, holding a security and selling that security short and a call option against a shorted stock. A perfect hedge eliminates the possibility for a future gain or loss. An imperfect hedge insures against a portion of the loss.
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Help-wanted index
A monthly survey of 51 newspapers' help-wanted ads that is considered an indirect measure of the change-in-labor demand across the country. It is compiled by the Conference Board, a nonprofit business-research group in New York.
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High-yield bond
These are the lowest quality bonds. Bonds with credit ratings below BBB from Standard & Poor's or Baa from Moody's Investor Services are considered speculative because they have a greater chance of default than investment grade bonds. High-yield bonds are usually issued by smaller companies without long track records or by companies with questionable credit ratings. To compensate for the additional risk, issuers offer higher yields than investment grade bonds. In recent years however, junk-bond yields have declined as their popularity has increased and default rates have slowed. They are also called junk bonds. See "Types of Bonds."
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Holding company
A company whose principal assets are the securities it owns in companies that actually provide goods or services. A holding company enables one corporation and its directors to control several companies by holding a large stake in the companies.
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Home-equity debt
Borrowing secured by a homeowner's equity in a home. Home-equity loans allow you to borrow a certain amount and pay it back over a specified term, and they generally carry fixed interest rates. Home-equity lines of credit allow you to draw upon them as needed, and they usually carry adjustable rates. Interest payments on up to $100,000 of home-equity debt are generally tax-deductible. (That is on top of the interest write-off you get on mortgage loans of up to $1 million.)
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Home-equity loan
A loan offered by banks and other mortgage lenders that allows a homeowner to tap the built-up equity in his or her home. Home-equity loans allow you to borrow a certain amount and pay it back over a specified term, and they generally carry low fixed interest rates. Interest payments on up to $100,000 of home-equity debt are also tax-deductible. (That is on top of the interest writeoff you get on mortgage loans of up to $1 million.) If you're thinking of consolidating your debt, taking out a home-equity loan is an effective means. See "Should I Consolidate?"
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Hostile takeover
An acquisition of one company by another despite resistance from the target company's board. Often an acquirer will take its transaction directly to the shareholders of the target company, offering to buy their shares through a tender offer or seeking their approval to remove opposing members from the target company's board.
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Hot issue
A stock that attracts attention because its share price has risen substantially, and in many cases is expected to rise further.
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Housing completions
The Commerce Department's monthly survey of the number of completed single- and multifamily homes. The level of housing completions can be seen as an indicator of economic growth, although housing starts is usually considered more relevant.
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Housing starts
The Commerce Department's monthly survey of the number of housing permits issued by local government authorities.
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